Light rail on Dominion Rd is one of the big projects being discussed right now and is being actively investigated.

An impression of what Light Rail on Dominion Rd would look like

During the Unitary Plan debate I saw many people raise concerns that Dominion Road does not have the zoning to support Light Rail. While the zoning was been increased following the Independent Hearings Panel (IHP) Recommendations which the council ultimately agreed with (subject to appeal), I believe there is still some low hanging fruit to increase zoning without affecting the Heritage Areas zoned Single House Zone (SHZ) in the Final Plan. Here’s a comparison of the two versions, the operative plan having a bit more:

Terraced House and Apartment Buildings (THAB) – orange – up to four storey apartments

Mixed Housing Urban (MHU) – peach – up to 3 storey terraces

Mixed Housing Suburban (MHS) – yellow – up to 2 storey terrace

I have come up with 4 low hanging fruit suggestions, with 1 potential opportunity for Land Use for Dominion Road Light Rail, there is also a map with the options areas highlighted below.

The MHU around Mt Roskill close to Dominion Road could be rezoned THAB

Some of the MHS could be be rezoned MHU

The MHS could be rezoned to MHU & some of the MHU be rezoned as THAB.

For the Mixed Use Zone & Town Centre Zoned Areas along Dominion Road, remove Height Variation Controls that reduce the standard height limits, and consider implementing height variation controls that increase the height limit slightly. This would allow store frontage to be redeveloped/renovated keeping the Character of Heritage Shops while allowing Apartments to be built on top.

The last potential opportunity is areas close by Dominion Road who would prefer to catch the Light Rail & with good cycle links, or using Crosstown services would do so. This is due to potential time savings due to the priority the Light Rail has, as well as access to both Downtown/Uptown/Midtown, current Bus Routes do not give the same access to all three. As we’ve already seen in Auckland, many will often prefer to travel further for a service they perceive is of higher quality. One example of this could be seen during the roll out of electric trains where some people changed when they travelled so they caught an electric service rather than a diesel one. The two areas in question are Stoddard 5A on Map & Royal Oak 5B. These areas are already highly zoned, however Stoddard would likely not have Light Rail until after Dominion Road while the modelling in the Central Access Plan now says light rail on Mt Eden Rd is not needed until post 2040. By providing access to the Light Rail through good reliable Crosstown Buses (For Royal Oak this is Crosstown 7 & for Stoddard Crosstown 8) as well as cycling links these areas could have greater access to the Light Rail Network, while taking pressure of Sandringham Road, and Mt Eden Road bus services, admittedly due to the distance this may not be successful but is still possible.

Overall these options would allow the Heritage Areas to stay untouched, but would Upzone other areas close to the Light Rail route, this would align Land Use better with any potential Light Rail for Dominion Road. Of course any changes would have to go through at current the standard Resource Management Act process, and some of the Upzoning is potentially limited due to Heritage Protections of some of the Shops, as well a Viewshaft Overlay Controls which restrict height.

So what do you think, great, not bold enough, or the Decisions version will be fine?

In August we celebrated as the Unitary Plan was finally approved by the council and then formally notified after a four-year roller coaster of a process. Even better was the end result was actually pretty good, far better than we could have hoped for back in February after the agreed to most of the changes the Independent Hearings Panel made. Things were looking up, that we might actually be able to start to addressing the housing crisis that has pushed people out of the city or even worse, to have to live in a car.

Unfortunately, yesterday the council announced the plan had suffered the same fate as car below after running into an Auckland 2040/Character Coalition shaped bollard (we could also do with some of those bollards in our bus lanes)

Following notification of the Unitary Plan on August 19, there was a 20 working day window for people to appeal the plan. Appeals were possible to the High Court on points of law but there were limited rights of appeal to the environment court “where the council either rejects a recommendation made by the Panel, or accepts a Panel recommendation that is identified as being beyond the scope of submissions on the PAUP” (Proposed Auckland Unitary Plan). In total there were 106 appeals, 65 to the Environment Court, 41 to the High Court, and eight applications for a judicial review.

Most of those only related to specific sites, such as a land owner complaining about the zoning of their property. But the council have deemed that a joint appeal by Auckland 2040 and the Character Coalition on the residential zoning has meant that the zones and the zoning and maps can’t become operative. Here’s what the council says about it.

However a joint appeal lodged by Auckland 2040 and the Character Coalition, which is broad in scope, has the potential to impact residential development across Auckland.

Because that appeal challenges certain zoning decisions, the zoning maps cannot become operative until that appeal is resolved. This may mean that applications for resource consent to develop a property will also need to be assessed against the relevant operative legacy planning zones and rules.

“Until all appeals are resolved, Auckland Council is required to assess all resource consent applications against parts of both the old and new plans,” says Ms Pirrit.

“Decisions will need to be made on a case by case basis as to how much weight can be given to the Proposed Auckland Unitary Plan versus the operative legacy district and regional plans.”

“In practical terms, this will add greater complexity and a degree of uncertainty for applicants while the appeal process is ongoing.”

So to get consent, developments will need separately pass the old and the new criteria. That sounds onerous and something bound to add a lot of cost to the process or could perhaps even stall much needed developments for up to a year until the appeal is resolved. This almost sounds like a nightmare and one of the worst case scenarios that could have happened.

It appears that even the Character Coalition were unaware of just how much impact their appeal would have, perhaps they got some bad advice.

@TransportBlog Weirdly, Sally Hughes just told me she didn't mean to hold up the whole Plan, would be "distraught" if she was

At the same time, it wouldn’t surprise me if council are being overly cautious about this and are playing it conservatively to prevent further issue if it was perceived they weren’t taking the process seriously. Either way I certainly hope this is able to be resolved quickly because Auckland can’t afford any delays in trying to address the housing crisis that already exists.

For the parts of the plan that aren’t affected by this appeal, the council are holding their final governing body meeting of the term and staff have recommended they make those parts operative. This will also be the final meeting for Mayor Len Brown and Councillors Arthur Anae, George Wood and Cameron Brewer who are not standing for re-election.

This is the third installment in an ongoing series on the politics and economics of zoning reform. Last week’s post took a look at the outcomes from the Unitary Plan process, which included a mix of political decision-making and technical assessment. The data in this post raised a few interesting questions, including: Why did councillors take a relatively conservative approach to the notified Unitary Plan?

In his fantastic book Zoning Rules! The Economics of Land Use Regulation, which I reviewed at the start of the year, William Fischel argues that zoning decisions generally respond to demands from politically active “homevoters” who agitate to minimise risks to their own property values.

While this doesn’t necessarily hold true in all cases, it’s a useful heuristic for understanding councils’ decision-making. And it suggests that when seeking to explain zoning decisions we should begin by asking: Who submitted on the plan?

After notifying the Unitary Plan to the public in September 2013, Auckland Council received submissions from around 9,300 individuals or organisations, who made a total of 93,600 unique requests. The submissions are all available online if you want to read them in detail.

I didn’t want to bother reading them in detail, so I started with some simple statistical analysis. Approximately 5,900 submitters provided an address, which allowed Auckland Council to match them to one of the city’s 21 local boards. This allowed me to identify which areas of Auckland had more or less submissions. Here’s a map showing submissions per capita.

Interesting map. We can immediately see three things:

People in rural areas – especially Rodney – submitted on the plan at higher rates than people in urban areas.

Two urban local boards stand out as having high submissions per capita – Orakei and Devonport-Takapuna. They are both relatively well-off coastal areas.

Submission rates in the west and south were much, much lower – as shown in the yellow band through the city.

All in all, people who lived in Rodney or Orakei were over ten times as likely to put in a submission on the Unitary Plan than people who lived in Henderson-Massey or Mangere-Otahuhu.

This is an extraordinarily large amount of variation, and it’s not matched by other indices of civic participation. For instance, voter turnout wasn’t ten times as high in Orakei as it was in Henderson or Mangere. So what factors are driving the differences?

Ideally, we’d be able to take a look at the decisions made by individuals – for instance, by surveying people on their decisions about whether or not to submit. But that’s a bit over the top for a blog post, so I’m going to take a quick look at some demographic factors that might underpin different submissions rates at a local board level.

More specifically, I want to investigate three hypotheses that are (loosely) derived from Fishel’s “homevoter hypothesis”. They relate to the time and money that people have to get involved in the process, and people’s sense of “ownership” over their neighbourhood:

Hypothesis 1: Areas with higher median incomes are more likely to submit at higher rates

Hypothesis 2: Areas with a higher share of home-owning households are more likely to submit at higher rates

Hypothesis 3: Areas with a higher share of people over the age of 65 are more likely to submit at higher rates

All demographic variables were measured at the local board level using data from the 2013 Census. (NB: These weren’t the only factors I considered, but they seemed to be the most relevant ones.)

The following table summarises results from a simple OLS regression, which measures the correlations between multiple explanatory variables (the local board demographic variables) and a single outcome variable (Unitary Plan submissions per 1000 residents). The statisticians among our audience will find it pretty intuitive; for the rest, here is an explanation of the findings:

At a local board level, a higher median personal income was associated with a higher rate of submissions on the Unitary Plan. This correlation was highly statistically significant (1% level). On average, every $1000 increase in median personal income was associated with another 0.51 UP submissions per 1000 residents.

A higher share of residents aged 65 and over was associated with a higher submission rates. This correlation was also statistically significant (5% level). On average, every 1% increase in the share of seniors was associated with another 0.47 UP submissions per 1000 residents.

After controlling for incomes and age, there was no statistically significant relationship between the share of households in rental accommodation and submission rates.

These factors “explain” about 56% of the variations in submission rates between local boards. In other words, income and age are quite important to overall outcomes.

Outcome variable:

UP submissions per 1000 residents

Explanatory variables

Model coefficients

Median personal income ($000s)

0.507***

(0.113)

Percent 65 years and over (%)

46.973**

(20.086)

Percent renting (%)

7.693

(7.927)

Constant

-19.147**

(7.363)

Model statistics

Observations

21

Adjusted R2

0.557

Residual Std. Error

2.455 (df = 17)

F Statistic

9.365*** (df = 3; 17)

Note:

*p<0.1; **p<0.05; ***p<0.01

In short, areas with more wealthy people and more retired people tended to submit on the Unitary Plan at considerably higher rates. While there is an idiosyncratic story lurking behind every submission, demographic factors seem to have played a crucial role in shaping the submissions that Auckland Council received on the Unitary Plan.

This raises several questions:

First, how much stock should policymakers place on submissions as opposed to inputs gathered from other sources, like demographically-representative surveys? In asking this question I am not dismissing submissions entirely – the people who submit are also more likely to have relevant knowledge about the issue at hand. But is it plausible to think that people in wealthier and older areas are ten times more knowledgeable than people in poorer and younger areas?

Second, how should planning processes account for the preferences and needs of people who are invisible in the consultation process? If you care about the substance of democracy as well as the form, as I do, this is an important question. There are in fact many things that can be done to divine people’s underlying preferences for various things in cities. Perhaps we should invest more in this sort of research.

Third, to what extent did submissions on the Unitary Plan affect the process at different stages? For instance, were the areas that Auckland Council chose to “downzone” between the draft and notified versions of the Unitary Plan concentrated in local boards with higher submission rates? And what about the outcomes from the final Unitary Plan recommended by the hearings panel? These are obviously hard questions to answer in full without an extremely in-depth analysis of the 93,600 unique requests that people made. But there may be some simple insights we can get from a higher-level analysis; stay tuned…

This is the second post in an ongoing series on the politics and economic of zoning reform. The first part looked at the costs, benefits, and distributional impacts of reforming urban planning rules to enable more development. This part takes a more specific look at the most recent reform to Auckland’s planning system: the Unitary Plan.

Now that the hearings are over, the submitters have been heard, and the politicians have voted, it’s worth asking: What have we gotten from the Unitary Plan? Does it take us in a useful direction, and to what degree?

In order to give a coherent answer to this question, I’m going to have to simplify matters. The UP does a lot to regulate development and local environmental issues – addressing everything from air quality to zoning for factors. But it has the strongest effects are on the city’s housing market. The UP shapes how much housing can be built, where it can be built, and how easy it is to get permission to build it.

Consequently, I’m going to focus on the impact of the Unitary Plan on people’s ability to build more homes in the city. Zoning capacity isn’t the only thing that matters, but it’s important. Cities that have “downzoned” severely, like Los Angeles in the 1970s and 80s, typically experience rising housing prices, while cities that “upzone” significantly, like Tokyo in the 1990s, tend to have an easier time keeping prices under control.

The great down-zoning of LA (Morrow, 2013)

In order to estimate the UP’s impact on Auckland’s capacity to build more homes, I’m going to draw upon “capacity for growth” modelling produced by Auckland Council and subsequently updated throughout the hearings process. As changes to the modelling methodology make a like-for-like comparison a bit difficult, I’m going to have to piece together the overall results.

The 2012 Capacity for Growth Study estimated the number of homes that could be built under the legacy zoning rules that were put in place prior to Auckland Council amalgamation. The modellers estimated a measure of “plan-enabled capacity” – i.e. the total quantity of housing that could be built within the city if everyone (re)developed their site to the maximum permitted under the zoning rules.

This is obviously an implausible scenario, as many people won’t choose to redevelop, at least for a while. So the results are best thought of as a theoretical upper bound rather than a realistic estimate of what would happen in practice. As we’ll see, this was addressed in subsequent modelling undertaken during the hearings.

With that caveat in mind, the modellers found that the legacy zoning rules allowed between 250,000 and 345,000 additional dwellings to be built in Auckland. The lower number reflects the maximum capacity for infill development, while the higher number reflects the maximum capacity for redeveloping residential sites.

The 2013 Capacity for Growth Study used the same methodology to assess the version of the UP that was notified by Auckland Council after consultation on the plan. This showed that the notified UP had only made incremental increases to infill and redevelopment capacity within the city.

The modellers found that the legacy zoning rules allowed between 258,000 and 417,000 additional dwellings to be built in Auckland. The lower number reflects infill capacity, while the higher figure reflects redevelopment capacity. However, it also noted future greenfield areas with capacity for around 90,000 additional dwellings.

Taking the greenfield areas into account, the notified UP would have delivered a 39-47% increase in capacity for housing, relative to the legacy zoning. That difference is shown in the following diagram. Essentially, the Unitary Plan as originally conceived would have been at most an incremental improvement.

Things get a bit more complex when comparing between the notified UP and the final version of the UP that was recommended by the Independent Hearings Panel and approved (with minor tweaks) by Auckland Council. The modelling methodology changed in the course of the hearings, with the focus shifting from “plan-enabled” capacity to “commercially feasible” capacity. In effect, a new model was built to filter out sites that wouldn’t be profitable to develop.

You can see that in the following chart. The commercially feasible capacity enabled by the notified UP is 213,000 additional dwellings – only 42% of the full plan-enabled capacity.

The key thing in this chart is the change between the notified UP and the final UP. Feasible capacity has increased from 213,000 to 422,000 dwellings, or a 98% increase. Most of the increase in capacity comes from within existing residential zones, thanks to rezoning and changes to zoning rules to allow people to build more dwellings on the same amount of land.

So if we squint a bit, we can put these estimates together to get a rough picture of the overall outcome:

The notified UP increased plan-enabled capacity by 39-47% relative to the legacy plans

The final UP increased feasible capacity by 98% relative to the notified UP

This implies that the final UP has increased the zoning envelope by around 175-190%, relative to the legacy plans (i.e. 1.98*1.39 to 1.98*1.47).

Equivalently, if we assume that only around 42% of the plan-enabled capacity under the legacy zoning plans would be commercially feasible (a similar ratio to the notified UP), we can put together the following chart:

Is this sufficient? Time will tell. Getting housing, transport, and place-making right for Auckland doesn’t end with a planning rulebook. But the final UP is undoubtedly a large step away from the broken status quo.

As this is a series on the economics and politics of zoning reform, I want to close with a few simple observations that arise from the quantitative analysis in this post.

The incremental changes observed between the legacy plans and the notified UP reflect the outcome of a political process. Council put out a draft plan for consultation, and then pulled back a lot of the changes in response to criticism.

The considerably larger changes between the notified UP and the final UP arose from a technical process – the independent hearings.

Although the IHP recommended, councillors decided. The final UP was voted up by many of the same councillors who had pulled back to a more conservative position three years before.

This in turn raises two questions that I will revisit in future posts in this series. First, why did the political process deliver a more conservative outcome than the technical process? And second, what changed between 2013 and 2016 to obtain a different outcome from the council votes on the plan?

The documents that were made available at 5pm included the final version of the plan the Council finished agreeing to earlier in the week. Also available from then were the minutes from that council meeting and so while we wait to see if there are any appeals, I trawled through the minutes to see which way the Mayor and Councillors voted on key issues and tried to put that information into a table. This includes both votes where a division was called and the Mayor and Councillors individually stated their position and votes where the resolution was passed but someone wanted their dissent noted.

A couple on notes about the tables.

While most of it was fairly straight forward to follow, it can get a bit confusing when some votes are delayed or especially in the case of item 6.14.1 (which covers the zoning maps) it can be hard to follow who was at the table, who wasn’t and who couldn’t participate due to conflicts of interest.

I don’t intend on posting all of the results as some of them are fairly boring technical matters where everyone agreed so I’ll just focus on a few key areas. You can click on the images for a bigger version.

The outcomes as to whether a vote was good or bad is based on my judgment call based on what we’ve discussed in the past or the result that will make it easier to deliver more housing. On some votes you may disagree with how I’ve scored it.

I’ve only included a small explanation of the items voted on but have also included the page number the vote appeared on in the minutes should you wish to scroll through to see more information.

First up a number of hot topics including heritage and viewshafts

Here are some of the items related to the City Centre and business zones. We were supporters of deleting the minimum dwelling sizes so most Councillors get marked down for voting to keep them.

And here are some of the residential zones. One odd observation is that Cameron Brewer supported keeping minimum dwelling sizes in the City Centre but opposed keeping them in the general residential zones.

There are obviously a lot more votes and as mentioned, many are fairly boring.

One of the reasons for pulling the data together was also to see which Councillors were the most or least supportive. The graph below counts the total number of red boxes from the tables above and the rest of the results. As you can see there was clearly one Councillor whose name came up more than others. To be fair not all votes are necessarily equal, especially some of the dissents which can be for fairly minor things but I think it is interesting none the less.

So they did it, the council actually passed a reasonably good Unitary Plan, a feat that just six months ago seemed so unlikely. This represents a fairly historic moment for Auckland as for the first time, the region will have a single set of planning rules that enable the city to grow and are also aligned with the policies and goals of the region.

The Unitary Plan would easily be the largest planning exercise in New Zealand’s history, representing around four years of work for the council, the public and the Independent Hearings Panel (IHP). While planning matters can often seem fairly dull, documents like the Unitary Plan have such far reaching implications that getting a decent plan as a base to build off was important and it appears that the council has largely done that. It also means any future work can focus on smoothing out some of the remaining rough edges rather than having to make wholesale fixes.

One quite notable feature at this end of debate on the Unitary Plan has been the lack of opposition to it from groups like Auckland 2040 who have fought the plan all the way along. It now appears that their opposition to the plan peaked in February. Perhaps it was the optics of fighting against enabling housing in the middle of a housing crisis, perhaps it was because their leader – Richard Burton – was overseas or perhaps it was just they realised was pretty good.

Councillors started debating the recommendations from the IHP and the council officer’s responses to those recommendations on Wednesday and positively they seemed to do it in decent humour, something that can’t be said for all council debates. The meeting had budgeted to take till this coming Thursday but in a fairly surprising move the Councillors were able to move through the agenda relatively well and most of the thorny issues were wrapped up by Friday leaving the last few issues till today.

Over the last four years, some Councillors have been fantastic and perhaps none deserves larger praise than Deputy Mayor Penny Hulse who has guided the process all the way along. A number of other Councillors have also been strong supporters all the way through.

Interestingly during this most recent debate another surprise hero emerged and it was none other than Dick Quax who had many wondering if they had woken up in an alternate universe. He argued and voted positively on many of the topics up for discussion and I’m sure I’m not alone in wondering why its taken so long to see this side of him. Conversely the single worst performer was Mike Lee who opposed almost all measures to provide more housing, voting against them time after time.

A week ago we highlighted some of the key issues the council officers did/didn’t agree with the IHP and recommended the council change or reject them. I had hoped to break down and analyse the various votes but unfortunately the minutes containing the voting records aren’t available yet (and I didn’t have the time to trawl through the hours upon hours of video from the meeting). At a high level they:

Deleted the Sites and Places of Value to the Mana Whenua overlay

Deleted the blanket pre-1944 heritage overlay, the special character and overlay still exists though.

Rejected the watering down of language around ensuring land-use transport integration.

Agreed to shift the Rural Urban Boundary to the District Plan, enabling it to be changed via private plan changes.

Agreed to remove the requirement for a minimum number of “affordable” dwellings in a development.

Lowered the number of dwellings that can be built on a site as of right, above which requires a resource consent, from four to two.

Agreed with the recommended zoning, with a few exceptions, this includes at some last minute hot spots at Okura and Crater Hill

Didn’t agree with the IHP or the officers and removed the minimum parking requirements for retail from centres. This was a surprise and fantastic outcome

The final Unitary Plan will be formally notified on Friday and there will be a window of 20 working days for limited appeals. I suspect one of the most likely appeals will be from the large retailers to try and reinstate the IHPs position of keeping minimum parking requirements in centres for retail businesses – something the retailers argued for at the hearings panel but which is primarily about making it harder for small businesses to compete with them.

Thank you to everyone, who has helped advocate alongside us for a good Unitary Plan, especially our friends at Generation Zero who have put in a huge amount of hard work in support of a better city.

Thank you also to the all of the council staff who have worked so hard to make this plan a reality. They deserve a celebration for effort they’ve put in but of course if they do there’ll be the usual negative voices complaining about spending ratepayers money.

Lastly, well done and thank you to the Mayor and Councillors for finally passing the plan. With better rules in place it also means the focus for improving housing also now shifts back to the government.

On now is the last major topic which is zoning. This includes Rural Urban Boundary changes, including contentious areas like Okura. There are also ‘catch-all’ votes to accept the panel zoning in the South, West, North, Rodney and Central. After that there is just technical amendments and votes on designations to be done.

This morning so far:

Residential rules have passed. Officer proposals to shift land use consent requirements from 5 to 3 dwellings were passed without debate.

The zoning for the South, West and Rodney has already passed, though a few exceptions where office changes voted on.

The council rejected the panel’s zoning for Crater Hill 10 – 9. This opens this up for Environment Court appeal.

The Council accepted the zoning for a Clevedon Waterways Development that the staff reccomended to be turned down.

Key issues this morning including the Rural Urban boundary, mangroves and various Regional Policy Statement issues.

Major decisions made this today so far include:

Accepting the panels recommendation to shift the Rural Urban boundary from the Regional Level to the District Level, which makes it possible for private developers to propose changes. See coverage from the herald here. Council officers claimed that protections in the policies will help ensure growth is well managed.

A more restrictive approach for removing mangroves

Recommendations on Ports of Auckland rules accepted

Fascinating debate over minimum apartment sizes. Council officers suggested reinstating a minimum size of 35m2 in the city centre zone. Cathy Casey & Linda Cooper called for minimum sizes, & made arguments that everyone should have the room for a pet. Dick Quax, Arthur Anae and Penny Webster made good arguments in favour of not having minimum sizes. They noted that people could make their own decisions, and some would want to live in micro apartments of 20 -30 m2, noting that the city centre allows for a range of different lifestyle choices. In the end the motion to reinstate minimum apartment sizes was passed 17 – 3, with Dick Quax, APenny Webster & George Wood as dissenting voices. However the officers did note that applicants could apply for a Resource Consent to go lower and show the apartment was designed well.

As Toby Manhire observed, “the most remarkable thing is the response… on the whole it’s been incredibly positive”. Reasonable people could have reservations about aspects of the IHP’s recommendations, but most of the views I’ve seen recognise that the finished plan is a good step forward to solving the housing challenges the city faces.

Meanwhile, the UK has voted to Brexit the EU and a large share of Americans – possibly even a majority if we’re unlucky – are planning on voting for Trump. So New Zealand seems to be ahead of the curve on pragmatic problem-solving. Yay!

What’s the problem?

Housing is expensive in New Zealand, especially in Auckland, where median house prices have increased fivefold since the early 1990s (in nominal terms). Roughly half of this increase has occurred in the last four years, which is causing quite a bit of concern:

Although short-term dynamics can be mysterious, elasticity of housing supply is the main long-term driver of housing market outcomes in a growing city. The easier it is to build new dwellings in the right places in response to increased demand, the less upward pressure there will be on prices.

The empirical evidence suggests that housing supply in Auckland is slightly inelastic – somewhere in the range of 0.7 to 0.9. This isn’t horrible, but nor is it sufficient to get housing supply in balance with demand.

Severe geographic constraints – Auckland’s harbours and steep hillsides – appear to be an underlying driver of the city’s inelastic housing supply. In this context, settling for average urban planning policies means getting a limited supply of housing and high prices. Consequently, we have to make it much easier to use scarce land efficiently. That means reforming our approach to planning regulations. In the past, we adopted land-hungry policies like minimum parking requirements or severebuilding height limits without thinking through their ill effects. That has costs, and we need to do better.

Auckland is not the only city coping with high housing prices and a lack of supply – you see similar problems in places like London, New York, San Francisco, and Sydney. However, I would bet that New Zealand will do a better job sorting out its housing affordability issues than other places. In fact, I am betting on it! I’m renting in Auckland, which means that I bear all of the downside and none of the upside of spiraling housing prices.

There are three reasons for my optimism:

1. Our proven track record of policy reform

Let’s start with a pat on the back. Having lived in New Zealand, the United States, and Nigeria, I’d say that Kiwis are, by and large, pretty reasonable when it comes to public policy. We’re not very corrupt, which removes one major source of inefficiency. We generally recognise that as a small, distant trade-exposed country we can’t afford to do things inefficiently. And, due to New Zealand’s small size, there’s usually no need to over-complicate things.

Policymaking anywhere will always be subject to cognitive and professional biases – people screw things up, and sometimes it takes a while to sort it out – but New Zealanders don’t seem want totally irrational or insane policies. Unlike the US, say:

Possibly as a consequence, New Zealand has a record of reforming policies that aren’t working, either incrementally or in one go. The classic example of this is in trade policy. From the 1930s to the 1980s, the New Zealand government oversaw an extensive set of import controls. Te Ara describes this policy:

Faced with declining export returns and a foreign exchange crisis, a Labour-led government introduced foreign exchange controls and import licensing regulations in 1938. The regulations prohibited the import of any goods except under licence or where exempted.

Importers had to apply to government for both an import licence and the foreign exchange needed for purchases. The quota – the amount that could be imported with a licence – was set on the basis of imports the previous year.

Just as restrictions on the efficient use of land produce windfall gains for landowners while foisting large costs on renters and new home-buyers, import licensing created fortunes for some manufacturers while making most consumers worse off. As a consequence, after experimenting with some liberalisation of trade policy in the 1970s and 1980s, the remaining import controls were swept away in the late 1980s.

Recent changes in transport policy also demonstrate our ability to reform bad policies. Over the last decade, there have been some important, although undoubtedly incremental, moves to reform our inefficient monomodal urban transport system.

This is a big deal, but it’s hardly the only story in town. How about the fact that central and local governments are now coming to the party on urban cycleways? For the first time ever, significant investments are going towards one of New Zealand’s “missing modes”.

We now have an opportunity to take the same approach to urban planning – reform what isn’t working and get better outcomes.

2. The structure of our governments

The current structure of New Zealand’s governments makes it easier to implement reforms and make them stick. We have two key advantages in this area that offer a smoother path to policy reform.

First, New Zealand’s government has a unitary structure rather than a federal one. This means that most powers are concentrated in central government rather than distributed among multiple layers of government. Political centralisation certainly isn’t all good – in the past it’s often led to a perverse situation in which urban transport policy is being designed by rural politicians.

But in this case, it makes policy changes much easier. If central government were to, say, issue a National Policy Statement on urban development or rewrite sections of the Resource Management Act (which governs the development and implementation of urban planning rules), it would lead to changes in the way that local governments regulate. That option isn’t usually available in federal systems.

Because any proposal to liberalise planning rules inevitably creates controversy at local body election time, central government involvement can potentially assist in getting important changes over the line.

Second, the creation of the unified Auckland Council ensures that all growth tradeoffs – and the negative consequences of preventing growth – are internalised within a single council. Gone are the days when councils could simply refuse to zone for growth and assume that it would become someone else’s problem instead. Now a single council is responsible for sorting the region’s problems out.

You can see the results in the Unitary Plan – a document that’s not perfect (no plan is!) but which takes some important steps forward. For example, it removes MPRs from the centre zones, which are intended to accommodate a mix of business and residential uses, cuts back minimum lot sizes throughout much of the city, and creates some midrise residential zones.

Amalgamation does come at a potential cost to Tiebout competition, in which adjacent councils compete for growth. But I suspect that the benefits outweigh the drawbacks. As the San Francisco Bay Area shows, local government fragmentation doesn’t necessarily result in more housing supply – the Bay Area has 93 local governments but building permits have still been falling since the 1970s.

New Zealand’s unitary government structure and the creation of a consolidated Auckland Council create the potential for “virtuous cycles” in which local and central government egg each other on to improve urban planning regulations and processes. To date, this has led to things like the Special Housing Areas, which aims to ease consenting in selected areas, and the Unitary Plan hearings process, which is intended to review the plan and allow it to be implemented faster.

The hearings process, in particular, has encouraged Auckland Council to think carefully about its proposed zoning rules. For example, following instructions from the hearings panel, the council is considering rezoning some areas to enable more housing. This is an important step towards recovering from the ill effects of past down-zoning.

Lastly, housing affordability has hit the political radar at a national level. There is an increasing consensus that reforms to urban planning rules are a key part of the solution. The latest Productivity Commission report on using land for housing outlined some key policy changes, and politicians from several major parties have subsequently endorsed a number of these recommendations. For example:

In other words, there is likely to be cross-party support for sensible reforms to urban planning that build on the good work that’s already been done by central and local government.

Globally speaking, it’s somewhat unique – and fortuitous – to have so much attention placed on urban planning issues at both a local and central government level. For example, in the US, a few economists in the Obama administration are starting to talk about the drawbacks of overly restrictive planning regulations. But President Obama has very little ability to influence zoning in San Francisco or New York.

New Zealand is different. We are generally willing to reform policies that aren’t working for us, we’ve got government structures that can facilitate that reform, and our elected representatives are paying attention to the problems and potential solutions. Those seem like good reasons for optimism!

The Auckland Council starts debating the recommendations of the Independent Hearings Panel on the Notified Unitary Plan this morning. This will be a standing blog post that collates the latest updates on the process. As this stage the debate is set down for 3 days, and the Auckland Council has a statutory deadline of the end of next week to notify their recommendations. However this deadline can be extended for 20 working days if requested by the Minister of the Environment.

Thursday’s agenda:

A number of key debates should come up on Thursday. This includes:

Design Assessments

Shifting the Rural-Urban boundary from the Regional Plan to District Plan (allows private companies to apply to make changes)

City Centre rules (including the port)

Residential Zone rules (including minimum dwelling size)

Wednesday in brief:

The first order of business was to shift consideration of the details of the Unitary Plan from the Auckland Development Committee to the Governing Body. This was after Independent Maori Statutory Board members agreed that this was the best way forward.

The Governing Body meeting started on an interesting note with Dick Quax suggesting the council adopt the whole of the IHP’s recommendations without debate. However councilors like Penny Hulse & Chris Darby noted their were some technical mistakes that needed to be fixed, and also a need to have debate in the open. The Quax motion lost 13 to 7.

The first set of recommendations to accept all areas of the plan where the officers had noted there were no major shifts from the council’s position passed without any trouble. The council moved onto recommendations where the panel proposed some changes. Their were some small debates early in the afternoon, notably the fate of Civic Administration building (confirmed as Category A). Later in the afternoon several key debates came up. The first was the IHP’s proposed rejection of places of significance to Mana Whenua. The IHP recommendations were confirmed 12 to 6. The last major debate of the day was over the proposed removal of the 1944 heritage overlay that required consent for the removal of any building built before 1944. After a bit of back and forth this also passed 15 to 5.

For an alternative (and much more interesting take) have a look at this Spinoff article that sums up the day, and a most unlikely champion for the Unitary Plan